Deficit and Debt

1. Deficit and Debt

Igor Kupriyanovich
Polina Novikova
GMU3-4

2. Main opinions

A budget deficit occurs when spending is greater than the
revenue received in that year. When spending exceeds
revenue, it's called deficit spending.
The national debt is the accumulation of each year's deficit.
When revenue exceeds spending, it creates a budget surplus.
A surplus reduces the debt.

3. How the U.S. Deficit and Debt Are Different

The U.S. budget deficit was $211 billion in August 2018.
That's much lower than the record high of $1.4 trillion
reached in FY 2009.
The U.S. debt exceeded $22 trillion on February 11, 2019.
That's more than triple the $6 trillion debt in 2000.

4. How Debts and Deficits Affect the Economy

In the long run, debt can damage the economy because of
higher interest rates. Other issues occur if the U.S.
government lets the value of the dollar fall. One effect is that
the debt repayment will be in cheaper dollars. As this
happens, foreign governments and investors become less
willing to buy Treasury bonds, which forces interest rates
even higher.

5. !WARING!

Rising debts and deficits may endanger Social Security. As the
government devotes more of its revenues to pay
the mandatory cost of Social Security, it has less money on
hand to stimulate the economy, which can further slow
growth.

6. Thank you for attention!